U.S. pours $7.5 billion into GMAC

[rickaren]

U.S. pours $7.5 billion into GMAC

Posted Friday, May 22, 2009, 1:15 pm in Employee News

The U.S. Treasury Department said on Thursday it has put another $7.5 billion into auto lender GMAC to enable it to support both Chrysler LLC and General Motors car buyers and partly meet a shortage of capital, Reuters reported.

The widely anticipated action is intended to help counter a scarcity of credit that has helped drive sales of domestic cars into a ditch, the wire service said. The Federal Reserve also extended an exemption that will let GMAC keep lending to GM dealers and retail customers, which it normally would be barred from doing since it now is a bank holding company in which GM has an interest, Reuters said.

The new capital is on top of $5 billion Treasury put into GMAC last December. Treasury said the new investment includes $4 billion to help GMAC lend to Chrysler dealers and retail customers, while the remaining $3.5 billion is intended to plug GMAC capital shortages identified as part of “stress tests” conducted on 19 of the largest banks, the story said. (Reuters)

[rickaren]

Press addresses GMAC investment

Posted Tuesday, May 26, 2009, 3:47 pm in Employee News

Jim Press, Vice Chairman and President, North American and International Sales, Global Marketing, Product Strategy, Service and Parts, issued the following statement May 22 regarding GMAC Financial Services:

“With nearly 90 percent of our U.S. dealers now activated for retail business through GMAC Financial Services, we’re very pleased about the U.S. Department of the Treasury’s announcement yesterday to invest in GMAC, to originate new loans to Chrysler dealers and consumers. As Chrysler transitions our dealer network, we are also very pleased with the speed and professionalism that GMAC Financial Services has demonstrated to Chrysler and our dealers. We look forward to a successful partnership that benefits both our consumers and dealers.”

Earlier in the month, Chrysler LLC signed a financial services agreement with GMAC Financial Services to provide the automotive financing products and services to Chrysler’s dealers and customers. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep® and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail.

GMAC Financial Services will be able to offer the best long-term finance options for Chrysler LLC dealerships and customers, and is established as a bank holding company with access to a variety of funding sources.